But, errr, don't get too excited with the MS forecast... its revised up but to lower .... if that makes sense ... anyway, read on

  • We revise up our forecast for the AUD to 0.70 by 4Q17 (from 0.65), but retain our relatively bearish outlook for the currency.
  • Our upward revision reflects a marking-to market of the continued rally in bulk commodities, which we believe has been a key factor behind the appreciation of the currency since year-end.
  • Meanwhile, tightening front-end rate differentials still represent an opposing force, pulling the AUD lower.
  • We believe this will continue to be the case, given substantial slack in the Australian labour market and a weak outlook for housing, which means the RBA is unlikely to tighten policy any time soon.

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